US Futures Fall After Weak Payrolls Report

(REUTERS) -- U.S. stock index futures traded lower on Monday after last week's much weaker-than-expected report on U.S. job creation for March.

U.S. non-farm payrolls grew by 120,000 in March, far below the forecast gain of 203,000 jobs. The unemployment rate dipped to 8.2 percent, down from 8.3 percent in February.

The report casts doubt over the ability of the U.S. economy to help boost the global economy as Europe's debt crisis resurfaces and worries remain whether China will avoid a hard landing.

A lack of major economic data on Monday will keep investors focused on Friday's report, which came in on an equity market holiday.

Bank shares could rank among the most badly hit Monday. The Select Sector SPDR Financial ETF fell 1.5 percent in light premarket trading, with Bank Of America off 1.7 percent at $9.07.

S&P 500 futures fell 15.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 105 points, and Nasdaq 100 futures fell 27.5 points.

The weak payrolls report could renew hopes for more monetary stimulus from the Federal Reserve. The central bank last week released minutes from its March meeting that suggested less of an appetite among committee members for more stimulus despite their expressing worries about the sluggish pace of U.S. growth.

U.S. equities have rallied sharply in recent months, gaining nearly 30 percent since early October to push the S&P 500 near four-year highs. The market has stalled in the last few weeks as investors question the swiftness of the gains and whether economic data is strong enough to warrant higher stock prices.

Earnings will come to the fore this week, with bellwethers Google Inc. and JPMorgan Chase & Co. expected to report results. Alcoa will on Tuesday be the first Dow component to report.

(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)